KARACHI: Pakistanâ€™s â€˜war on terrorâ€™ has cost $118 billion so far, a new report by the State Bank has said.

The State Bank of PakisÂ­tan (SBP) in its annual report on Thursday showed that extreÂ­mist violence cost the country $118.3bn in direct and indirect losses from 2002 to 2016.

â€œBoth economic growth and social sector development have been severely hamÂ­Â­pered by terrorism-related incidents,â€ the report said.

Pakistan became a pivotal US ally in the battle against extremism after the Sept 11, 2001 attacks spurred the US invasion of Afghanistan.

A Coalition Support Fund was approved by the US to support Pakistan in the war, with an annual release of around $1bn since 2002. By last year Pakistan had receÂ­ived a total of $14bn.

The SBP said that apart from causing immeasurable human suffering, including casualties and mass displacement, the war had helped drive away foreign investment, stall domestic investment, freeze exports, and slow down trade.